The following table compares the Compound Annual Growth Rate (CAGR) between the various options regarding who is in power in the United States. It is an interesting study.

For the next two years we'll have a Republican as President and the House and Senate controlled by the Democrats. How has that turned out historically? From 1945 there have been eleven cases that are the same. The S&P 500 produced a CAGR of 3.62% during those years. It is the lowest of all possible options. The only other group with more cases is when the Democrats held power in all three branches of government - with a total of twelve cases.

What is the best possible situation? When Democrats hold the executive branch and either Republicans hold the House or the Senate. The second best option is Democrats are also in the Oval Office, but Republicans hold both the House and the Senate. Unfortunately, in both of these cases the number of cases is so limited that the statistical significance is lowered.

zeelotes.org - Election Groups

So let's enlarge the sample size by going back to 1895. In this case, the first ranked position remains the same because no other cases fall into that group for the earlier history. The second worst returns are when Republicans hold all power, while the worst returns are the same as for 1945-2026.

zeelotes.org - Election Groups

So if history has anything to say about it, the next two years are not going to be good for the stock market!